The latest federal relief package will allow some struggling Hawaii businesses, including Hawaiian Airlines, to return some involuntarily laid-off or furloughed workers to their jobs.
Sherry Menor-McNamara, president and CEO of the Chamber of Commerce Hawaii, said the latest stimulus is encouraging but that more help will be needed to meet the needs of the broad range of Hawaii businesses.
“This round left out support for the state, which was an important partner for Hawaii businesses during the last stimulus round. Those dollars helped fund programs like the Hawaii Restaurant Card, the Hawaii Business Pivot Grant and more,” Menor-McNamara said.
Menor-McNamara said in addition to providing the Payroll Support Program to airlines, which are a critical component of Hawaii’s economy, the most recent federal stimulus package also provides additional payroll protection program funds.
She said the additional PPP will help qualifying businesses, even those who already have used PPP, keep employees working. However, Menor-McNamara said fewer businesses will meet the criteria, which restricts PPP distribution to businesses that have 300 or fewer employees and are able to show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
“Hopefully, PPP will help stabilize some businesses,” Menor-McNamara said. “But some of the businesses that qualified for the first wave won’t qualify for this one. Certainly, they are going to need more help.”
Menor-McNamara said the chamber and other advocates will continue to petition Congress for more support, including additional funding for states and new items like commercial rent relief.
“Many of our businesses are on a lifeline,” she said. “Conditions have worsened. Back in April, 6% of the Hawaii businesses that we surveyed said they couldn’t survive COVID. By August, 17% said they wouldn’t make it.”
While many Hawaii businesses have been forced to make cuts during the pandemic, Hawaiian Airlines has been one of the hardest-hit as fear of COVID-19 and government restrictions dropped travel demand.
The new $900 billion federal stimulus signed by President Donald Trump on Dec. 27 will allow Hawaiian to return some of the employees who were involuntarily furloughed. Hawaiian reduced its workforce by about 2,400 workers Oct. 1 after the first CARES Act Payroll Support Program ended.
Hawaiian spokesman Alex Da Silva said in a statement that the latest Payroll Support Program “will allow us to offer options to employees on furlough and help position the airline industry and our economy for a quicker recovery.”
Da Silva said Hawaiian is still determining how many workers might be brought back through the most recent PSP funding, which will support jobs through March 31.
Da Silva said Hawaiian’s first round of PSP “provided a critical financial lifeline during the first six months of the COVID-19 pandemic, supporting our team members as they continued to provide critical passenger and cargo transportation for the communities we serve. Unfortunately, travel demand remains suppressed due to travel restrictions, and the PSP extension will help us through these unprecedented challenges to our business.”
Prior to COVID-19, Hawaiian was one of the state’s largest employers and was enjoying a long growth period. From 2005 to March it had gone from about 3,500 to 7,447 employees, about 90% of whom were working in Hawaii. By last month Hawaiian had only 5,043 employees.
Hawaiian Holdings Inc., the carrier’s parent company, hasn’t reported its fourth-quarter 2020 earnings yet. However, the airline reported a third-quarter 2020 net loss of $97.1 million, or $2.11 a share. In comparison, during the third quarter of 2o19, Hawaiian’s net income was about $80.1 million, or $1.70 a share
Hawaiian’s third-quarter 2020 revenue fell to just over $75.9 million, a nearly 90% drop from the $755 million-plus that it realized in the third quarter of 2019. The airline reported a third-quarter daily cash burn of about $2.6 million.
Hawaiian’s losses were in keeping with the airline industry, which according to Airlines for America (A4A) expects “cash burn to persist through much of 2021.”
A4A President and CEO Nicholas E. Calio said in a statement that the organization’s member airlines applaud Congress for passing the bipartisan Consolidated Appropriations Act, 2021.
“We are especially grateful for the provisions to provide direct payroll support to U.S. airlines and protect the jobs of flight attendants, mechanics, pilots, gate agents and others,” Calio said. “Our employees are the backbone of the industry and our greatest resource, and carriers have been doing everything possible to protect their jobs. Now, as our nation looks toward recovery, it is more critical than ever to have our employees on the job and ready to assist.”